Question

​Lori's Company has the following​ items: cash in a checking​ account, $ 6 comma 000​; cash in a savings​ account, $ 1 comma 000​; highminusgrade government securities due in one month​ (purchased last​ month), $ 3 comma 546​; accounts​ receivable, $3,000. How much should appear as Cash and Cash Equivalents on the balance​ sheet?

Answer 1

The correct answer is $10,546.

Step-by-step explanation:

According to the scenario, the given data are as follows:

Cash in checking account = $6,000

Cash in a savings account = $1,000

High -grade government securities due in one month = $3,546

Account receivable = $3,000

So, we can calculate the cash and cash equivalents by using following method:

Cash and cash equivalents = Cash in checking account + Cash in a savings account + High -grade government securities

By putting the value, we get

Cash and cash equivalents = $6,000 + $1,000 + $3,546

= $10,546.